Platinum’s Pyramid of Ponzi Schemes – and the People Involved

THE HUBERFELD FAMILY FOUNDATION – THE HUBERFELD-BODNER FAMILY FOUNDATION – PLATINUM PARTNERS AND AARON ELBOGEN

Lost Messiah, July 1, 2016

The Ponzi scam is named after Charles Ponzi, a clerk in Boston who first orchestrated such a scheme in 1919.

A Ponzi scheme is similar to a pyramid scheme in that both are based on using new investors’ funds to pay the earlier backers. One difference between the two schemes is that the Ponzi mastermind gathers all relevant funds from new investors and then distributes them. Pyramid schemes, on the other hand, allow each investor to directly benefit depending on how many new investors are recruited. In this case, the person on the top of the pyramid does not at any point have access to all the money in the system.

For both schemes, however, eventually there isn’t enough money to go around and the schemes unravel.

We have written multiple articles on Murray Huberfeld, Platinum Partners and their shenanigans. It is like peeling an union, only the onion grows new layers as we peel. As we see it, Murray Huberfeld is likely guilty of crimes on the order, though perhaps not quite as grand a scale as that of Bernie Madoff, only a little more savvy, a bit better dispersed and far more creative. His schemes have been hidden in plain sight for anyone wanted to just dig, unpeel whatever your word of choice.

Huberfeld’s Platinum investments, which can be found in multiple pages on this site and in a myriad of articles, both journalistic and blogged, included Black Elk, New Mountain Capital, Manhattan New York Equities, Bayberry Consumer Finance, the Bodner-Huberfeld Family Foundation and many others. While at one time loaning money to Platinum vis a vis his family foundation, he was investing in Platinum and profiting from the financial gains the funds actually did earn; or draining Platinum of money when the funds were losing. He made millions from Platinum and even more from the losses incurred by naive and trusting investors.

We have taken and continue to take the position that Huberfeld was covering one bad investment in the Platinum funds with another and as each failed, he positioned himself to drain assets out of the funds before investors demanded redemptions but after he had already found new investors to cover losses. This is the quintessential Ponzi scheme. Huberfeld would then reinvest money back into Platinum (or loan it to Platinum as the case may be) and do the same thing the next time he had a pool of investors ready and willing to throw caution to the wind with their finances. After all, when a company can boast 17% returns year after year (by building pyramids of Ponzi schemes), why not invest? There were only a few savvy enough to realize that when it’s too good to be true; that’s because it is, indeed, too good to be true.

THE HUBERFELD FAMILY TRUST

What we find intriguing and must thank our contributor on this one, is the Huberfeld Family Trust tax returns 990 statements (2002 and 2014 attached links). They are a who’s who of investments in different causes, Yeshivas, Chabad organizations; and more importantly a treasure trove of accounts receivable.

In 2014 Huberfeld’s trust had millions in loans to the Aaron Elbogen Irrevocable Trust ($1,500,000) ($1,500,000), which the 990 refers to as investments but are written in the loans/receivables category, the Huberfeld-Bodner Family Foundation ($1,369,730), Mortgages Receivable ($6,120,000) and a number of other smaller entities. We were unable to find corresponding links to these loans in the documents of the various companies mentioned.

With regard to the Huberfeld-Bodner Family Foundation, there are a few points to be made. First, there is undeniably a clear link between Huberfeld and Bodner which cannot be overlooked when ascertaining Bodner’s role in Huberfeld’s frauds. Second, the purpose of the loans is listed on the 990 are to “Assist Loans Made by Related Foundation.” We will be looking into the loans mentioned but they are not clear from the Huberfled-Bodner family foundation documents, nor is there any clear cross-reference to the loans themselves.With respect to the “Mortgage Receivable” was the trust registered to act as a Mortgage Bank? Additionally, is the percentage of return on that “investment” 1200%? If so, is that not a bit questionable? We find that number to be unrealistic, usurious or simply false.

In 2012 the Huberfeld Family Foundation provided loans to American Friends of Chesed L’Orchim which are listed as “personal guarantees” to “assist religious organization.” Why provide a guarantee when that same amount could have been donated? Here there is an “investment” in the Aaron Elbogen Irrevocable Trust which is listed as an “Investment in Two Partnerships and the interest rate if typed correctly is also apparently 1200% Huberfeld supposedly lent money to American Friends of Yeshiva Mir to “Assist Educational Institution” but why not simply donate that money? He also has a loan to “Mortgage Receivables” with an interest rate of 1200% listed as an “investment.” The same questions should be asked.

It is obvious from the returns that Murray Huberfeld has a deep and inextricable relationship with Chabad (see donations), that he both profits from and declares losses from Platinum Partners (see investments and loans), that there are millions of dollars circuitously accounted for and likely inconsistent with reality (see donations and loans) and that Huberfeld has his hands in multiple pockets. We have attached the two years of 990’s for review and included photos of some of the more interesting pages.

27 thoughts on “Platinum’s Pyramid of Ponzi Schemes – and the People Involved”

@anonymous Perhaps we should draw your attention to a current lawsuit filed by Sentosa against writers for Proforma. We will be posting on the lawsuit tomorrow. It addresses your comment about slander, defamation and libel. As to Hegel, he once said that “education is the art of making man ethical.” that is consistent with the Torah scholars you vouchsafe in your comments. Was it not Maimonedes who advocated for self-sufficence and hard work, discouraging a life dependent upon the toil of others? Weee the Satmar to be following Maimonedes to the letter they would not demand or even accept the Section 8, Medicaid, private education paid for by public dollars that is demanded by the Satmar of today. We will not even justify your reference to the Nazis with a response. That comment was unworthy of the eloquence of the rest of your criticisms.

Your list is bogus. I know two or three of the recipients of the funds that you name. They were indeed needy individuals. You are desperately trying to dig up dirt on Mr Huberfeld and it is unjustified.
ANYONE that knows him will tell you that he is NOT one of the unfortunately many shady orthodox fraudsters. He made a mistake, but this is not part of some widespread scam. If you run a blog, you really cannot operate on bullshit discredited rumors.
Forgive him his wealth. That is no reason to destroy him..

@Sandra, with all due respect, you might want to take your head out of the sand. We did not make up those names, his trusts and different entities reported them on publicly available information government sites. Whomever he gave money to who actually was in need, may that person thank his or her lucky stars (Baruch Hashem) that Huberfeld had a shred of conscience. These are not rumors. These are information which any idiot can find, we just found it and put it out there. For as much as he gave, he took twice if not more. For the good he has done, he has done something bad tenfold. You can keep your head in the sand believing in a “fairy G-dfather” but the reality is what it is and it is staring you in the face. Madoff had people similarly defending him. Here’s an article worth your read: http://www.npr.org/2012/05/01/151764534/psychology-of-fraud-why-good-people-do-bad-things

@sandra, dont be offended by Mr or Mrs lost messiah(whoever writes this blog), this is an individual filled with hate, a total lunatic, he has no proof on what he writes, just hates jews or people in general, maybe had a bitter past i dont know, he does the same with sex accusations and other stories, makes up stuff, write pompous articles, is also committing slander, i know that what goes around comes around and hashem will repay him, hopefully not too many people take him seriously.

Even though it looks like a private house, it is a shul. Mr huberfeld made a promise to the rov that he would buy it and maintain it when the rov was dying. And yes he transferred 650k and when he gives tzedakah checks it’s from that account. I can affirm that personally as my organization has received thousands upon thousands of dollars from him over the years. You could also outline the good that he does over the years. It really wouldn’t hurt

@ anonymous, Madoff too gave thousands upon thousands to charities, as did John Gotti, as have many like them. Somehow perhaps they justify the wrongs by settling accounts, so to speak, with rights. If we praise these men, can we in the same sentence condemn them with equal justice on both sides? And what about all of the Chabad organizations to which he gives money which in turn cover up abuses. He does not speak out against those abuses. It’s a vicious cycle. We have a hard time showering Huberfeld with compliments when differentiating good dollars from bad dollars is nearly impossible.

That’s a great point and the Torah does not permit us to give tzedaka l’hathila to justify wicked acts. Maybe after restitution and time served tzedaka B later may clean things up after the fact. The reasoning is befuddling and frustrating when we say oh it’s okay because of all the good. The fact is that it does t take much to wipe away all that good. We are not talking about shaving a buck here or there from time to time.

@lost messiah, we’ve been through this already, you dont seem to listen, you said the same thing with the Isaac Rosenberg drowning, one of your proofs that it was a homicide was because it was investigated by the homicide division, which is a bogus proof, because all suicides are investigated by the homicide division, and when i pointed that out, you found some other baloney proof, “that since the case is still open is proof that something is fishy” which is bogus too, because these things take time, i spoke to the lead investigator and she told me there is nothing to prove that it was anything else than a drowning, but you wont listen, and the reason is simple, you dont care for justice, you care for lambasting Frum Jews, so you will make up stories and believe made up stories as long as it is jew bashing, same with sex stories, where you explicitly stated that you will post names even if there was no court or proof other than somebody accusing them, you are transgressing the laws of America, and the laws of the torah, karma is a mad bitch, hashem will definitely repay you, maybe the law too, if someone takes you up in court

@lm, we’ve been through this before, you dont know how to listen, only to talk, at the Isaac Rosenberg drowning i spoke to the lead investigator and there was nothing to make one thing that it was anything else but a drowning, but you came with these crazy so called proofs, that since its investigated by the homicide division or since it takes so long therein lies proof that it might have been a homicide, which is bogus, because these things take time, and every suicide is investigated by the homicide division, same when you post names of alleged sex offenders, who haven’t even gone to court and you have no idea if its true or not, but obviously you dont know how to listen, just to talk, you are like an angry child on a mission to destroy the classroom, and with your slanderous ways you are transgressing the laws of America, and the laws of the torah, both of which can have consequences, either hashem’s wrath or the American long arm of justice coming down on you should someone take you up in court, you know karma is a mad mad bitch

@anonymous You argue against one article and compare it to another because you don’t like the theorem we have used to present the equation and our corresponding conclusions. That is not a problem with the authors, but rather the reader. We do not believe the men on that beach drowned any more than we believe that Murray Huberfeld is a beacon of generosity. That you want to see him in a rose-colored light tinted by the good he may have done with hard earned potentially dirty money is not part of our paint palette. Once you add black to any color, there is no going back. It will always be tainted. And, the men on the beach will, in our view, have been no less murdered, or perhaps helped along in their deadly mikveh. You are right that there is little sense in arguing.

@lm, there is a line running through all your articles, you dont have proof, you base your stuff on air, like i the Rosenberg drowning, you said that because it was investigated by the homicide division that is a sign that it was possibly murder, then i pointed out that every suicide is investigated by the homcide division, to which you didnt respond, but brought some other bogus proof, that because its still an open investigation, thats proof that it was murder, well it always take time before they close the investigation, i spoke to the lead detective, she told me there is nothing to give cause to doubt that this was anything other than a drowning plain and simple, but you hate jews so much that you have to make up stuff and stir up trouble,

@anonymous, hate Jews? If we hated Jews, we would not spend countless hours researching and writing these blogs. We do not like poorly behaved people who accumulate ill-gotten gains and cover up the abuse and victimization of young children. It is a shame that Jews, particularly those who profess piety and “philanthropy” have their own unique interpretation of the Torah and are anything but altruistic. It is mind-numbing that any Jew could be so anti-Zionist that they punish or disavow their own for serving in the Israeli military and then rely on the children of others for the comforts of a Holy Land and a safe haven for criminal behavior. It is reprehensible that any Jew could live in the State of Israel and burn an Israeli flag or any other country and not respect the flag of their home country. Finally, it is confounding that people like you are so desperate to shut your eyes to the ills of other Jews that you are willing to hide in references to the Torah and, best of all, the Nazis.

@lm, FYI one of the reasons the halacha is against messirah, (unless where permitted)is because in the secular court system, one witness is enough to base proof upon, whereas the torah viewpoint is that one witness is not enough proof to validate a truth, and so was the opinion of Moses, the prophet Ezekiel, rabbi Akiva, rabbi Meir, Maimonides, Nahmanides, rabbi Josef Karo, as well as the other legal luminaries of Jewish thought, but you and your ilk obviously disregard that, because you don’t believe in the torah thought process

@someone/anonymous to say that we do not believe in the Torah thought process is misleading and using broad and ill-defined brush strokes. There is quite a difference between pure Torah Judaism and Rabbinic Judaism. Were pure Torah Judaism in its truest form to be practiced by the subjects of our articles and this blog, the notion of Mesira would also be pure as would the people who preach Divinity. Therein, lies the paradox as our blog would then be obsolete. Our “ilk” does not believe in detestable behavior enshrined in Torah as defined by those who are so ill-behaved as to taint it’s very meaning.

@lm you obviously dont agree to the thought process of Maimonides, Nahmanides, and Rebbe Akiva, Rabbi yosef Karo, and all the Jewish religious legal luminaries from after the old testament, because they all wrote specifically against messirah, you only believe in the old testament and interpret it to your liking, now when most jews in the world say “torah”, they would refer to the aforementioned men of stature, so no, you dont believe in the torah thought process, and btw, you kinda use broad and ill defined brush strokes yourself when you slander whole groups, like satmar, or orthodox jews, so its ironic that you should complain about that, and btw you are also going against amercian law, you have no right to slander people if their guilt wasn’t substantiated, but i guess you haven’t learned your lesson yet because nobody has taken you up in court yet

@lm you sounds like a christian scholar, or a German philosopher, sort of like Hegel, maybe you should put on a Nazi uniform, buy yourself a gun, and get to work….rid the world of the jew vermin…(note the sarcasm)